S&P 500 Ends With Third Weekly Loss 05/24 16:12
Stocks on Wall Street notched modest gains Friday, erasing some of the
market's steep losses from a day earlier.
(AP) -- Stocks on Wall Street notched modest gains Friday, erasing some of
the market's steep losses from a day earlier.
The upbeat finish to a turbulent week still left the market with its third
straight weekly loss.
Stocks swung between gains and losses all week as investors weighed the
prospect of a prolonged trade war between the U.S. and China. Trading has been
volatile since the dispute escalated earlier this month, with both sides
raising tariffs on each other's goods.
Financial companies led the buying Friday as the yield on the 10-year
Treasury note reversed part of a steep slide a day earlier. Rising yields boost
interest rates on loans, which makes lending more profitable.
The modest gains snapped a two-day losing streak for the S&P 500 as
investors saw opportunity after the previous days' wave of selling.
"Today you're just seeing a rebound, really almost across the board, so that
tells you yesterday everything was just being sold with no rhyme or reason,"
said Ben Phillips, chief investment officer at EventShares.
The S&P 500 rose 3.82 points, or 0.1%, to 2,826.06. The benchmark index
ended the week with a 2.3% loss.
The Dow Jones Industrial Average gained 95.22 points, or 0.4%, to 25,585.69.
The Nasdaq composite added 8.72 points, or 0.1%, to 7,637.01.
Small company stocks fared better than the rest of the market. The Russell
2000 index climbed 12.73 points, or 0.9%, to 1,514.11.
Major stock indexes in Europe finished broadly higher.
The market's modest rebound came ahead of a three-day holiday weekend. U.S.
stock markets will be closed Monday in observance of Memorial Day.
The resumption of trade hostilities this month has interrupted a market
rally that saw the S&P 500 recoup the fourth quarter's sharp loss and hit a new
high. The index is down 4.1% so far in May, though it's still sporting a gain
of 12.7% for the year.
The U.S. and China concluded their 11th round of trade talks earlier this
month with no agreement. Instead, the U.S. moved to increase tariffs on Chinese
goods, prompting China to reciprocate. The trade dispute escalated further
after the U.S. proposed restrictions on technology sales to China, though it
has temporarily backed off.
President Donald Trump said Thursday that he expects to meet with his
Chinese counterpart Xi Jinping at a summit next month in Japan. Both sides have
expressed a willingness to resume negotiations, while at the same time
ratcheting up antagonistic rhetoric, leaving investors confused about what
happens next.
Investors will likely be stuck dealing with a volatile market until the
outcome in the trade dispute becomes clear. As such, investors are starting to
realize that the conflict could drag on much longer than initially anticipated,
said Craig Birk, chief investment officer at Personal Capital.
"The lesson learned lately is that nobody knows," Birk added.
Technology companies have borne the brunt of the market's monthlong downturn
as they face the possibility of restricted sales to Chinese companies. The
sector eked out a tiny gain Friday. HP rose 4.4% and Intuit climbed 6.7% after
reporting solid profits and issuing a surprisingly good forecast.
Financial stocks led the gainers. Capital One Financial rose 1.7% and Bank
of America finished 1.5% higher.
Health care companies also notched gains. Medtronic picked up 1.5%.
Consumer staples, which include beverage and packaged food makers, declined
the most. Constellation Brands slid 3.7%.
Utilities also fell as traders shifted their money into riskier holdings.
That marked a reversal from a day earlier, when investors bought up utilities,
bonds and other safe-play holdings. The yield on the 10 year Treasury rose to
2.32% after slipping to 2.29% late Thursday, its lowest level in more than a
year.
Shares in Tesla slumped 2.5%. A series of analyst notes have questioned
demand for the troubled electric automaker's cars. Tesla stock has lost ground
for seven of the last eight trading days and has surrendered almost 43 percent
of its value since the start of the year.
A couple of retail stocks had big moves in opposite directions Friday.
Foot Locker tumbled 16%, erasing all its gains for the year. The shoe store
reported disappointing first quarter financial results and trimmed its profit
forecast.
Hibbett Sports surged 20.9% after the sporting goods retailer blew past Wall
Street's profit expectations and raised its forecast for the year.
Energy futures ended broadly higher, recovering some of their steep losses
from a day earlier.
Benchmark U.S. crude climbed 1.7% to settle at $58.63 a barrel. Brent crude,
the international standard, closed 1.4% lower at $68.69 per barrel.
Wholesale gasoline added 1.1% to $1.93 per gallon. Heating oil gained 0.5%
to $1.97 per gallon. Natural gas rose 0.8% to $2.60 per 1,000 cubic feet.
Gold fell 0.1% to $1,283.60 per ounce, silver slid 0.4% to $14.56 per ounce
and copper added 0.7% to $2.70 per pound.
The dollar fell to 109.33 Japanese yen from 109.49 yen on Thursday. The euro
strengthened to $1.1209 from $1.1183.
(BAS)
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